Tuesday 25 July 2017

Q1 2017 Update for Mapletree Logistics Trust



MLT released their Q1 results yesterday. Here are some key highlight of their Q1 2017 performance.
  • DPU increased by 2% from 1.85 to 1.887 cents.
  • Slight decrease in Net Asset Value from S$1.04 to 1.02.
  • Aggregate leverage increased slightly from 38.5 to 39%.
  • 79% debt hedged into fixed rates & 70% of income stream for FY17/18 hedged into SGD.
  • Decrease in portfolio occupancy rate to 95.5% on 30 Jun 17 from 96.3% on 31 Mar 17 

While MLT's DPU has continued to rise, I am slightly surprised by the decrease in portfolio occupancy rate; which is likely due to the dip in occupancy in South Korea from 98.4% to 83.3%. Will continue to monitor if there are any improvements in the next quarter results. I still rate MLT as a quality purchase and there should be no major business issues in the near-term. 

Most of my shortlisted shares have already well-exceeded my target buy price. On the sell side, some stocks are reaching my target sell price. However I am likely to adopt a wait-and-see attitude before making any sell decisions as there are no significant changes to the global landscape yet. During this period I am likely to focus on building up my cash "war-chest" to prepare myself to buy in when opportunity arises. 

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Friday 14 July 2017

Should we use our Annual Performance Bonus to Top up our CPF?


As an employee, we would work very hard to secure our monthly pay-check and the ultimate annual performance bonus. Recently, I was engaged in various discussions on how to use our bonus. Some people even told me that the sum of money is causing them a headache because they do not know how to use it! Alamak, I really won’t mind helping you to solve this problem! 😜
So what would I do with my performance bonus?
For the initial years of my career, they would all end up transforming into shares investment or into my future funds such as emergency funds as well as expenses for wedding, house renovation, etc. From last year onward, I started to set aside up to S$7K to perform voluntary cash top-up to my CPF Special Account. Why? 
Like many, my initial considerations were just for the tax reliefs, potential gain from the CPF interest rate and to max up my CPF SA as quickly as possible. Later on, I wanted to open up the option of using my CPF OA money to pay for subsequent property investment. As I could only use the excess CPF OA savings above the CPF Basic Retirement Sum* for the purchase, cash top-ups & their interest returns would help to accelerate this process. My latest thought was that the money in CPF could also act as an “insurance” or “monetary support” for my wife/family members in the event that I suddenly pass on. Minimally the money could help to cover arising related expenses for my family. My personal philosophy on this is:
“We can be positive about the future but must be prepared and responsible for what happens next
Simply, I want to still be responsible for related matters even for the future beyond my life. If you are interested to find out more about cash top up to your CPF SA, I will recommend to start off with EzHuat’s article here.
Rambling a bit more about a related discussion among my fellow Huats, YoloHuat pointed out that people might not want to perform cash-top ups due to their upcoming payment needs. For this case, I fully agreed with her. Topping up our CPF is still an investment, and we should only do it using our spare cash! Recall that my personal experiences (see post) taught me to: ONLY INVEST WITH MY SPARE CASH.
There is no one-way of using our annual performance bonus and it would depend on the outcome that we hope to achieve. We have a choice on what we want to get out of it, for a good vacation to reward our family and ourselves, or for investments to prepare for financial-freedom, etc. Nothing right or wrong. Ultimately, we just have to be comfortable with the decisions made and be responsible for the subsequent outcome. :)
* Note that the Basic Retirement Sum is reviewed by CPF every year. As of now, savings in our CPF OA & SA (including amt used for investment under CPFIS-SA) can be used to meet this required amount.
Together, let us all Go & Huat ah!
GoHuat

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Tuesday 4 July 2017

Do You Know the Meaning of Financial Freedom?

I want to be financially free!

This is probably the dream of everyone. What exactly is financial freedom? How do you achieve it?

By convention via a linear pathway, we were taught to study hard, get good grades, enrol into good schools, go to the University. After graduation, you find a good-paying job and then work work work to climb up up up the corporate ladder. 

After going through all the stressful periods farming your hard earned money, you then feel the urge to spend spend spend to satisfy your material needs, pamper yourself like royalty on holidays, buy bigger houses, cash in on the latest car models etc. After splurging on those big-ticket items, you then feel the pinch and obediently goes back to work to earn back the money again. Sounds familiar? 

Indeed, most people trade the bulk of their time for a paycheck. I'd term this a 'vicious cycle in perpetuity'. In other words, it is a self-imposed rat race. 

What is financial freedom?
As the name suggests, it means being free financially where you can maintain your lifestyle without worrying about a monthly paycheck, bills, food and entertainment expenses etc. 

Financial freedom is not merely about having more money. We have seen wealthy people fall from grace and become bankrupts, high-income earners who had to slog/borrow/beg to pay off debts or people who seems to be rich on the outside but actually poor on the inside.

On the flip side, we also witness ordinary people who earns modestly and lives simply. Despite that, they are able to do what they like. They work because they want to work, not because they need to work. They can afford a yearly holiday trip and some occasional splurges yet don't feel a pinch in their wallet.

Achieving financial freedom is about how you make use of money wisely with a peace of mind.

If money is not an issue, what would you do?
To understand financial freedom, you need to ask yourself the question above.

Would you travel around the world?
Would you start a new business?
Would you spend more time with your loved ones? 
Would you spend your time volunteering and help the needy? 
Or would you take on new hobbies?

Being financially free gives you these options. 

Take control of your life
To achieve financial freedom, here are some simple steps you need to take:
- Avoid debts
- Spend less than what you earn
- Invest your spare cash
- Generate multiple income streams 
- Set your financial goals. Know what you are working towards to
- The earlier you start, the better
- Be grateful with what you have, don't compare with others

What does financial freedom means to you?
Building wealth is just part of the equation. There are many more aspects in life to appreciate such as building your health, happiness, dreams.

For me, financial freedom is more than just financials. It means having the time of freedom to do what I want to do. Instead of material possessions, I prefer to have freedom to spend time with my loved ones. Having the freedom to change my career, start a new business, take some time off to gain new perspectives through meditation, pursue my passion and dreams, travel the world to learn more about what this splendid world has to offer and celebrate for. 

It’s not about what I choose to do, it’s about having the freedom to choose who I want to be or do what I want in my life fulfillingly and meaningfully. 

Go forth and plan your financial journey. Believe in yourself and you will reap the fruits of labour eventually. 



I would love to hear your definition of financial freedom! I would appreciate if you could leave your comments below :)

Cheers, 
EzHuat